50 exam-style questions. Click an answer to see the explanation. These reflect the style and difficulty of the real NMLS SAFE exam.
QUESTION 01 / 50
Under RESPA Section 8, what is the minimum dollar amount for a kickback violation?
Answer: D — There is NO minimum dollar threshold under RESPA Section 8. Even $5 exchanged for a referral is a violation. The exchange itself is the violation — the amount is irrelevant.
QUESTION 02 / 50
A Loan Estimate must be received by the borrower within how many business days of a complete application?
Answer: B — Under TRID, the LE must be RECEIVED within 3 business days of a complete application with all 6 elements. Saturday counts; Sundays and federal holidays do not.
QUESTION 03 / 50
Which is NOT one of the six TRID application elements?
Answer: B — Credit score is NOT one of the six elements. The six are: Name, SSN, Income, Property Address, Estimated Value, and Desired Loan Amount. This is the most tested TRID fact.
QUESTION 04 / 50
ECOA requires adverse action notices within how many days of a complete application?
Answer: C — ECOA requires adverse action notices within 30 days of a complete application with specific, actionable reasons — not vague conclusions.
QUESTION 05 / 50
The minimum passing score on the NMLS SAFE exam is:
Answer: C — The minimum passing score is 75%. Below 75% is a failing score.
QUESTION 06 / 50
Which class is covered by ECOA but NOT by the Fair Housing Act?
Answer: D — Marital Status is ECOA-protected only. Familial Status and Disability are FHA-protected only. This distinction is tested constantly.
QUESTION 07 / 50
Under SCRA, what happens to interest above 6% on a servicemember's pre-service debts?
Answer: B — The excess interest above 6% is permanently FORGIVEN — not deferred, not accumulated. The servicemember will never pay it. This is the most tested SCRA fact.
QUESTION 08 / 50
A BSA CTR is required for cash transactions exceeding:
Answer: C — CTRs are required for cash transactions exceeding $10,000 in a single business day. Structuring to stay below $10,000 is itself a federal crime.
QUESTION 09 / 50
The cure window for TRID tolerance violations is:
Answer: C — The cure window is 3 CALENDAR years from the closing date. This is frequently tested.
QUESTION 10 / 50
The maximum escrow cushion under RESPA Section 10 is:
Answer: B — RESPA Section 10 limits the escrow cushion to 2 months of projected payments. Excess must be refunded within 30 days of the annual analysis.
QUESTION 11 / 50
Which transaction does NOT have a TILA Right of Rescission?
Answer: C — Purchase money mortgages do NOT have a right of rescission. The 3-day right applies to refinances, HELOCs, and home equity loans on primary residences only.
QUESTION 12 / 50
HMDA Code 2 means:
Answer: B — Code 2 = Approved but Not Accepted. The lender approved it; the borrower walked away after approval. Code 4 = borrower withdrew before the lender made a decision.
QUESTION 13 / 50
The maximum back-end DTI for a standard Qualified Mortgage is:
Answer: C — The maximum back-end DTI for a standard QM is 43%. GSE-eligible loans may go to 50% with strong AUS approval.
QUESTION 14 / 50
Texas Section 50(a)(6) limits all liens combined to:
Answer: B — Texas Section 50(a)(6) caps all liens at 80% of the homestead's fair market value. This is a hard constitutional cap.
QUESTION 15 / 50
The LO Compensation Rule prohibits:
Answer: B — The LO Compensation Rule prohibits dual compensation — receiving fees from both lender AND borrower on the same transaction. Also prohibits steering for higher pay.
QUESTION 16 / 50
HOEPA points-and-fees trigger threshold is:
Answer: B — HOEPA's points-and-fees test triggers at 5% of the loan amount. Any ONE of HOEPA's three tests alone triggers high-cost status.
QUESTION 17 / 50
A SAR must be filed within how many days of detecting suspicious activity?
Answer: C — SARs must be filed within 30 days of detecting suspicious activity, extendable to 60 days to identify a subject.
QUESTION 18 / 50
ECOA Regulation B requires credit records to be retained for:
Answer: B — ECOA requires 25 months retention from the date of credit decision notification — for both approvals and denials.
QUESTION 19 / 50
Fannie Mae's automated underwriting system is called:
Answer: B — DU = Fannie Mae. LPA = Freddie Mac. Do not mix these up — it is tested constantly.
QUESTION 20 / 50
Texas non-judicial foreclosure sales occur on:
Answer: B — Texas foreclosure sales must occur on the FIRST TUESDAY of the month, 10AM-4PM at the county courthouse. Jan 1 or July 4 moves the sale to Wednesday.
QUESTION 21 / 50
RESPA Section 9 prohibits:
Answer: B — Section 9 prohibits sellers from requiring a specific title company as a condition of sale. Penalty = 3 times the title insurance charge.
QUESTION 22 / 50
PMI automatically cancels when LTV reaches:
Answer: D — PMI auto-cancels at 78% LTV based on ORIGINAL purchase price and ORIGINAL amortization schedule — not current value, not extra payments.
QUESTION 23 / 50
When an MLO license expires, the MLO must stop originating:
Answer: B — Expired license = stop immediately. No grace period. Every transaction while unlicensed is a separate violation.
QUESTION 24 / 50
The maximum loan term for a Qualified Mortgage is:
Answer: C — 30 years is the QM maximum term. 40-year mortgages are NOT QM — this is a frequently tested fact.
QUESTION 25 / 50
TDSML maximum civil penalty per violation per day is:
Answer: C — TDSML can impose up to $25,000 per violation per day. The per-day structure makes ongoing violations extremely costly.
QUESTION 26 / 50
Steering under the Fair Housing Act means:
Answer: C — Steering = directing buyers toward or away from neighborhoods based on race or other protected class. Violates FHA Section 3604.
QUESTION 27 / 50
An ad saying '6.75% rate available' with no other disclosures violates:
Answer: B — A specific rate is a TILA trigger term requiring all 5 disclosures: APR, down payment, repayment terms, payment amount, number of payments.
QUESTION 28 / 50
A RESPA QWR must be acknowledged within:
Answer: B — QWR must be acknowledged within 5 business days. Substantive response due within 30 business days (extendable to 45).
QUESTION 29 / 50
Which IS a valid TRID changed circumstance?
Answer: C — A natural disaster is a valid changed circumstance. Lender errors and rate movements are NOT — the lender absorbs those costs.
QUESTION 30 / 50
SAFE Act minimum pre-licensing hours (federal) is:
Answer: C — 20 hours federal minimum. Texas requires 23 (20 federal + 3 state). The 8-hour figure is the annual CE requirement.
QUESTION 31 / 50
A lender discounts public assistance income. This violates:
Answer: B — Public assistance income must be counted at full value under ECOA. Discounting it based on source violates ECOA.
QUESTION 32 / 50
A Texas home equity loan must close at:
Answer: C — Texas 50(a)(6) requires closing at the lender's office, attorney's office, or title company. Home closings are constitutionally prohibited.
QUESTION 33 / 50
When a face-to-face borrower declines to state race, the MLO must:
Answer: C — For face-to-face applications, MLO must record BOTH the refusal AND their visual observation of apparent race/ethnicity.
QUESTION 34 / 50
Which is prohibited in a HOEPA high-cost mortgage?
Answer: C — Prepayment penalties are prohibited in HOEPA loans. Also prohibited: balloon payments, negative amortization, due-on-demand clauses.
QUESTION 35 / 50
GLBA opt-out rights apply to sharing NPI with:
Answer: C — GLBA opt-out applies to NON-AFFILIATED third parties only. Exceptions include loan processing, legal compliance, and fraud prevention.
QUESTION 36 / 50
An MLO suspects falsified income documents. Correct action is:
Answer: C — Stop and report to compliance immediately. Proceeding while knowing of fraud — even with notes — is knowing participation in mortgage fraud.
QUESTION 37 / 50
Conforming self-employed threshold is ownership of:
Answer: B — Exactly 25% ownership = self-employed. 24% = not self-employed. At 25%+, must provide 2 years of tax returns.
QUESTION 38 / 50
2024 standard conforming limit for 1-unit property is:
Answer: B — $766,550 is the 2024 standard limit. High-cost area limit is $1,149,825.
QUESTION 39 / 50
Approving a loan solely based on credit score without verifying income:
Answer: B — The ATR rule requires actual income verification. A credit score alone is NEVER sufficient to satisfy ATR.
QUESTION 40 / 50
Texas mandatory waiting period between HEL application and closing is:
Answer: C — 12 CALENDAR days — not business days. This is in addition to the TRID CD waiting period.
QUESTION 41 / 50
Blockbusting under the Fair Housing Act means:
Answer: B — Blockbusting = using racial change to induce panic selling. Violates FHA Section 3604.
QUESTION 42 / 50
A Closing Disclosure must be received at least how many days before closing?
Answer: B — CD must be RECEIVED at least 3 business days before consummation. Three events restart the period: APR increase over 1/8%, loan product change, or prepayment penalty added.
QUESTION 43 / 50
Disparate impact under ECOA means:
Answer: B — Disparate impact = neutral policy with disproportionate adverse effect, even without intent. Both disparate treatment AND impact violate ECOA.
QUESTION 44 / 50
Structuring cash transactions to avoid CTR filing is:
Answer: C — Structuring is a federal crime regardless of fund legitimacy. The crime is the INTENT to evade reporting requirements.
QUESTION 45 / 50
For Right of Rescission counting, Saturday is:
Answer: B — Saturday IS a business day for rescission counting. Only Sundays and federal holidays are excluded.
QUESTION 46 / 50
SAFE Act permanent bar applies to any felony involving:
Answer: C — Any felony EVER involving fraud, dishonesty, breach of trust, or money laundering = permanent bar with NO time limit.
QUESTION 47 / 50
Rental income used for qualifying under conforming guidelines is:
Answer: C — 75% of gross rent is used. The 25% haircut accounts for vacancies, management costs, and maintenance.
QUESTION 48 / 50
A servicemember invokes SCRA on a 7.5% pre-service mortgage. The 1.5% above 6% is:
Answer: C — Permanently FORGIVEN. The servicemember will NEVER owe it. The lender absorbs the difference.
QUESTION 49 / 50
The secondary mortgage market is where:
Answer: B — Secondary market = where already-closed loans are bought and sold. Fannie and Freddie operate here. MLOs work in the PRIMARY market.
QUESTION 50 / 50
Advertising 'Guaranteed lowest rates in Texas!' most likely violates:
Answer: C — Guaranteed rate claims are UDAP deceptive practices — rates cannot be guaranteed and the claim misleads reasonable consumers.